• Filing Date: 2018-07-13
  • Form Type: 10-Q
  • Description: Quarterly report
v3.10.0.1
Note 8 - Goodwill and Intangible Assets
3 Months Ended
May 31, 2018
Notes to Financial Statements  
Goodwill and Intangible Assets Disclosure [Text Block]
NOTE
8
– GOODWILL AND INTANGIBLE ASSETS
 
Intangible assets at
May 31, 2018
and
February 28, 2018
consist of the following:
 
               
May 31, 2018
   
February 28, 2018
 
   
Amortization
Period (in years)
   
Gross Carrying
Value
   
Accumulated
Amortization
   
Gross Carrying
Value
   
Accumulated
Amortization
 
Intangible assets subject to amortization
                                           
Store design
   
 
10
 
    $
220,778
    $
213,028
    $
220,778
    $
212,653
 
Packaging licenses
   
3
-
5
     
120,830
     
120,830
     
120,830
     
120,830
 
Packaging design
   
 
10
 
     
430,973
     
430,973
     
430,973
     
430,973
 
Trademark/Non-competition agreements
   
5
-
20
     
715,339
     
158,248
     
715,339
     
136,087
 
Franchise Rights
   
 
20
 
     
5,979,637
     
1,734,461
     
5,979,637
     
1,545,710
 
Total
   
 
 
 
    $
7,467,557
    $
2,657,540
    $
7,467,557
    $
2,446,253
 
Intangible assets not subject to amortization
                                           
Franchising segment-
                                           
Company stores goodwill
   
 
 
 
    $
1,099,328
    $
267,020
    $
1,099,328
    $
267,020
 
Franchising goodwill
   
 
 
 
     
295,000
     
197,682
     
295,000
     
197,682
 
Manufacturing segment-Goodwill
   
 
 
 
     
295,000
     
197,682
     
295,000
     
197,682
 
Trademark
   
 
 
 
     
20,000
     
-
     
20,000
     
-
 
Total
   
 
 
 
    $
1,709,328
    $
662,384
    $
1,709,328
    $
662,384
 
                                             
Total intangible assets
   
 
 
 
    $
9,176,885
    $
3,319,924
    $
9,176,885
    $
3,108,637
 
 
Effective
March 1, 2002,
under Accounting Standards Codification Topic
350,
all goodwill with indefinite lives is
no
longer subject to amortization. Accumulated amortization related to intangible assets
not
subject to amortization is a result of amortization expense related to indefinite life goodwill incurred prior to
March 1, 2002.
 
Amortization expense related to intangible assets totaled
$211,287
and
$110,546
during the
three
months ended
May 31, 2018
and
2017,
respectively.
 
During the
three
months ended
May 31, 2018
the Company reviewed its estimates of the future economic life of certain intangible assets. As a result of this review, the Company accelerated the rate of amortization of certain intangible assets to better reflect their expected future value. Consistent with the treatment of a change in estimate, the new rate of amortization of intangible assets will be applied to future periods.
 
At
May 31, 2018,
annual amortization of intangible assets, based upon the Company’s existing intangible assets and current useful lives, is estimated to be the following:
 
2019
  $
632,761
 
2020
   
706,177
 
2021
   
594,229
 
2022
   
490,060
 
2023
   
411,607
 
Thereafter
   
1,975,183
 
Total
  $
4,810,017